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Psychological Pricing in Modern Retailing: The Case of Wine Sector in Hard-Discounter Chains of Russia

Author

Listed:
  • Nikola Perovic

    (University of Donja Gorica-Podgorica, Montenegro)

Abstract

The main goal of this paper is to show if is possible to find a modern retail chain in one of the world largest economies that uses exclusively psychological pricing, as a dominant competitive advantage, in order to predominantly direct consumer behavior. Pricing, as a source of competitive advantage is the least explained in marketing literature, therefore it is important to contribute and show how psychological pricing is a source of competitive advantage. It could be an evidence to support the firm belief which exists among many retailers that greater than expected demand occurs at psychological price points. We shall analyze different retail chains belonging to so call hard-discounters in Russian Federation using method of observation and choose one sector in order to check the hypothesis. Hard-discounters are chosen since they use pricing strategies as the most important element of marketing program, much more important than products, promotion or sales channels, while Russia has been chosen as the largest growing wine market in the world.

Suggested Citation

  • Nikola Perovic, 2014. "Psychological Pricing in Modern Retailing: The Case of Wine Sector in Hard-Discounter Chains of Russia," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 4(1), pages 83-95.
    • Handle: RePEc:but:ijebfa:v:4:y:2014:i:1:p:83-95
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    References listed on IDEAS

    as
    1. Edward Oczkowski, 2001. "Hedonic Wine Price Functions and Measurement Error," The Economic Record, The Economic Society of Australia, vol. 77(239), pages 374-382, December.
    2. Schindler, Robert M. & Wiman, Alan R., 1989. "Effects of odd pricing on price recall," Journal of Business Research, Elsevier, vol. 19(3), pages 165-177, November.
    3. repec:bla:ecorec:v:77:y:2001:i:239:p:374-82 is not listed on IDEAS
    4. In, Younghwan & Wright, Julian, 2014. "Loss-leader pricing and upgrades," Economics Letters, Elsevier, vol. 122(1), pages 19-22.
    5. Zielke, Stephan, 2014. "Shopping in discount stores: The role of price-related attributions, emotions and value perception," Journal of Retailing and Consumer Services, Elsevier, vol. 21(3), pages 327-338.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    retail; price; strategy; discounter; positioning;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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